-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MwlVNpxCB9C8zr4IHI6mQxZfNx1Ui6RNYDN9Ox67vwbizs9NkPBySZOzPpNRbLMp N6n8aceyuypLxK48L4xj4w== 0001275287-06-001025.txt : 20060222 0001275287-06-001025.hdr.sgml : 20060222 20060222160542 ACCESSION NUMBER: 0001275287-06-001025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060222 DATE AS OF CHANGE: 20060222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEPHEID CENTRAL INDEX KEY: 0001037760 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 770441625 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30755 FILM NUMBER: 06636338 BUSINESS ADDRESS: STREET 1: 1190 BORREGAS AVE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4085414191 MAIL ADDRESS: STREET 1: 1190 BORREGAS CITY: SUNNYVALE STATE: CA ZIP: 94089 8-K 1 ce4910.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 FEBRUARY 22, 2006 ------------------------------------------------ Date of Report (Date of earliest event reported) CEPHEID ------------------------------------------------------ (Exact name of Registrant as specified in its charter) California 000-0030755 77-0441625 ------------------------ ------------ ------------------ (State of incorporation) (Commission (I.R.S. Employer file number) Identification No.) 904 Caribbean Drive Sunnyvale, CA 94089 ------------------------------------------------------------ (Address of principal executive offices, including zip code) (408) 541-4191 ---------------------------------------------------- (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION. The information in this report and the exhibit attached hereto are being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Act of 1934 or the Securities Act of 1933, except as shall be expressly set forth by specific reference to such filing. On February 22, 2006, Cepheid issued a press release announcing its financial results for the quarter and year ended December 31, 2005 and certain other information. The press release is attached to this report as Exhibit 99.01. ITEM 9.01: FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. Number Description - ------ ---------------------------------------------------------------------- 99.01 Press release dated February 22, 2006 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CEPHEID Date: February 22, 2006 By: /s/ JOHN L. BISHOP ------------------------ Name: John L. Bishop Title: Chief Executive Officer EXHIBIT INDEX Number Description - ------ ---------------------------------------------------------------------- 99.01 Press Release dated February 22, 2006. EX-99.01 2 ce4910ex9901.txt EXHIBIT 99.01 Exhibit 99.01 Cepheid CONTACTS 904 Caribbean Drive Sunnyvale, CA 94089 AT THE COMPANY: Telephone: 408.541.4191 -------------- Fax: 408.541.4192 John L. Bishop John R. Sluis CEO, Cepheid CFO, Cepheid 408-541-4191 408-541-4191 john.bishop@cepheid.com john.sluis@cepheid.com FINANCIAL RELATIONS BOARD: ------------------------- Tricia Ross Investor/Analyst Information 617-520-7064 tross@financialrelationsboard.com CEPHEID REPORTS FOURTH QUARTER 2005 RESULTS 15% Increase in Product Sales Drive 16% Increase in Total Revenues Product Sales for the Year Increase by 61% SUNNYVALE, Calif., February 22, 2006 -- Cepheid (NASDAQ: CPHD) today announced financial results for the quarter and year ended December 31, 2005. Product sales for the quarter ended December 31, 2005 increased 15% to approximately $22.2 million from approximately $19.4 million for the corresponding prior year period while product sales for the year ended December 31, 2005 increased 61% to approximately $80.4 million from approximately $50.0 million for the prior year. The increase in product sales for the quarter and year ended December 31, 2005 as compared to the corresponding prior year periods was primarily due to a 31% and 137%, respectively, increase in reagent and disposable sales. Total revenues for the quarter ended December 31, 2005 increased 16% to approximately $23.6 million compared to approximately $20.3 million for the corresponding prior year period while total revenues for the year ended December 31, 2005 increased 60% to approximately $85.0 million from $53.0 million for the prior year. The increase in total revenue for both the quarter and year ended December 31, 2005 as compared to the corresponding prior year periods was due primarily to the increase in product sales. Contract revenue of $0.9 million and $3.1 million for the quarter and year ended December 31, 2005 was primarily derived from the amortization of up-front license fees in connection with the Company's collaboration with bioMerieux. Gross Margin Dollars on product sales (total product sales less cost of product sales) for the quarter and year ended December 31, 2005 increased by 14% and 53%, respectively as compared to the corresponding prior year periods. The gross margin percentage on product sales for the quarter ended December 31, 2005 decreased to 43% from 44% for the prior year quarter and decreased to 43% for the year ended December 31, 2005 from 45% for the prior year. The decline in gross margin percentage on product sales for the year ended December 31, 2005 as compared to the prior year was due primarily to the impact of manufacturing inefficiencies with the anthrax test cartridge occurring in the second and third quarters which did not recur in the fourth quarter. In addition, amortization of up front license fees and higher ongoing royalty costs associated with the Company's patent license agreements entered into with Applera Corporation and F. Hoffman-LaRoche Ltd in the second and third quarter of 2004 as well as one-time favorable product pricing achieved in the first quarter of 2004 which did not occur in the year ended December 31, 2005 further impacted the gross profit margin. Net loss for the quarter and year ended December 31, 2005 was approximately $3.2 million, or $0.08 per share and $13.6 million, or $0.32 per share, respectively, compared to a net loss of approximately $3.0 million, or $0.07 per share and $13.8 million, or $0.34 per share, respectively, for the corresponding prior year periods. "Installation of Biohazard Detection Systems (BDS) within United States Postal Service (USPS) processing centers was completed during the fourth quarter of 2005. As the program neared completion, sales of the GeneXpert modules decreased as expected. However, this expected decrease was more than offset by a 62% increase in non-USPS related sales during the quarter thereby, contributing to the previously stated 15% increase in total product sales for the fourth quarter." "As noted in the release of our third quarter 2005 financials, the underlying root cause of our previous quarters' manufacturing inefficiencies and inventory exposure on production of our anthrax test cartridges was identified and corrected. As a result, we realized an improvement of approximately three percentage points in our gross profit margin on product sales in the fourth quarter as compared to the third quarter of 2005, per our expectation," stated John Bishop, Cepheid's CEO. Mr. Bishop continued, "Sales in our clinical market continued to show strong growth during the quarter and represented 15% of our total product sales for the fourth quarter 2005 as compared to 13% of total product sales in third quarter of 2005. ASR products for B. parapertussis and Norovirus were released to the market during the quarter. This brings our available ASR product menu to fourteen products. We also released the GeneXpert(R) system in the clinical molecular research market along with a BCR/ABL Research Use Only (RUO) product during the fourth quarter." 2006 OUTLOOK Commenting on Cepheid's outlook for 2006, Mr. Bishop stated: "Subsequent to the close of the fourth quarter of 2005, we completed the clinical trial for our Group B streptococcus (GBS) product and are nearing completion of the clinical trial for our Enterovirus (EV) product. We expect to file 510k's for these products with the FDA in the near future. Development of our MRSA test is continuing with a key objective focused on providing the clinician with the ability to specifically identify methicillin sensitive and resistant strains of Staphylococcus aureus (SA), and to avoid detection of staphylococcus strains that could lead to a false positive clinical result." "As part of a strong European initiative, we expect to release a number of European CE IVD marked products during 2006. These assays will be released as Conformite Europeene or European Conformity CE IVD Mark products under the European Directive on In Vitro Diagnostic Medical Devices, providing for routine clinical diagnostic use. During the first half of 2006 in addition to release of the GeneXpert System, we expect to release assays for BCR/ABL GBS and EV on our GeneXpert platform and for Epstein-Barr Virus (EBV) and cytomegalovirus (CMV) on our SmartCycler platform." "Development of our new 3 agent cartridge for detection of anthrax, Y. pestis and F. tularensis is nearing completion and the product is expected to be available for market launch in the near term. The USPS program is continuing to run smoothly and over 2.1 million tests have now been run on the installed BDS units with no false positives. Deliveries of anthrax test cartridges continue against the 2.3 million purchase order previously received from Northrop Grumman." "We expect sales in our Industrial market to continue to represent a significant proportion of our business with the introduction of several new products during 2006." "We expect our 2006 product sales to be in the range of $94.0 million to $98.0 million, based on anticipated sales from existing and new products and sales expected from the USPS program. We expect to see continued improvement in our gross profit margin realized on total product sales with margins expected to be in the range of 45% to 48%. We expect our 2006 net loss to be in the range of $7.0 million to $9.0 million or $0.16 to $0.21 per share based on actual weighted average shares outstanding of 42.7 million as of December 31, 2005. We also expect to cross over to profitability on an operating basis during 2006. This does not include the effect of stock option expense under the requirements of SFAS 123R." As of December 31, 2005, the Company had $37.2 million in unrestricted cash and marketable securities. CONFERENCE CALL INFORMATION Cepheid's CEO, John Bishop, and Senior V.P. and CFO, John Sluis will host a conference call today at 4:30 pm (Eastern) to discuss Cepheid's financial results, business highlights and outlook. The call will be simultaneously broadcast over the Internet. Interested participants and investors may access the teleconference call by dialing 800-240-5318 (domestic) or 303-262-2050 (international). There will also be a live webcast of the call on the Investor Relations section of Cepheid's web site at www.cepheid.com. Web participants are encouraged to go to the web site at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software. After the live webcast, the call will remain available on Cepheid's website, www.cepheid.com, through February 22, 2007. A replay of the conference call will be available at 800-405-2236 (domestic) or 303-590-3000 (international) through March 1, 2006; the conference ID is 11053565. The replay will be available after 6:30 pm (Eastern). ABOUT CEPHEID Cepheid (Nasdaq: CPHD), based in Sunnyvale, Calif., is a molecular diagnostics company that develops, manufactures, and markets fully-integrated systems for genetic analysis in the clinical, industrial and biothreat markets. The company's systems enable rapid, sophisticated genetic testing for organisms and genetic-based diseases by automating otherwise complex manual laboratory procedures. The company's easy-to-use systems integrate a number of complicated and time-intensive steps, including sample preparation, DNA amplification and detection, which enable the analysis of complex biological samples in its proprietary test cartridges. Through its strong molecular biology capabilities, the company is focusing on those applications where rapid molecular testing is particularly important, such as identifying infectious disease and cancer in the clinical market; food, agricultural, and environmental testing in the industrial market; and identifying bio-terrorism agents in the biothreat market. See www.cepheid.com for more information. This press release contains forward-looking statements that are not purely historical regarding Cepheid's or its management's intentions, beliefs, expectations and strategies for the future, including those relating to clinical trials, timing of future product releases, product performance, future revenues, future margins, future net losses and the status of the USPS BDS program. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the Company's current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: the scope of actual USPS funding in the future; the rate of environmental testing using the BDS conducted by the USPS, which will affect the amount of consumable products sold, and whether the BDS performs to specifications; unforeseen development and manufacturing problems, including with respect to the GeneXpert(R) system, cartridges, and reagents; the effectiveness of our recently-implemented process controls; the need for additional licenses for new tests and other products and the terms of such licenses; our ability to complete clinical trials successfully in a timely manner for products to be marketed in clinical markets; uncertainties related to the FDA regulatory and European regulatory processes; our ability to successfully commercialize our stand-alone GeneXpert(R) system; lengthy sales cycles in certain markets; the performance and market acceptance of new products; sufficient customer demand in the other markets; our reliance on distributors to market, sell and support our products; the occurrence of unforeseen expenditures, acquisitions or other transactions; our success in increasing direct sales; the impact of competitive products and pricing; our ability to manage geographically-dispersed operations; and underlying market conditions worldwide. Readers should also refer to the section entitled "Risk Factors" in Cepheid's Annual Report on Form 10-K for 2005 and its other reports filed with the Securities and Exchange Commission. All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ. (FINANCIAL STATEMENTS FOLLOW) CEPHEID CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended Year Ended December 31, December 30, ------------------------ ------------------------ 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues: Instrument sales $ 6,342 $ 7,273 $ 28,263 $ 27,922 Reagent and disposable sales 15,905 12,126 52,177 22,045 ---------- ---------- ---------- ---------- Total Product Sales 22,247 19,399 80,440 49,967 Contract revenues 850 926 3,062 2,967 Grant and government sponsored research revenues 552 20 1,508 34 ---------- ---------- ---------- ---------- Total revenues 23,649 20,345 85,010 52,968 ---------- ---------- ---------- ---------- Costs and operating expenses: Cost of product sales 12,614 10,916 46,232 27,541 Collaboration profit sharing 4,371 3,590 14,483 6,096 Research and development 5,164 4,372 18,961 15,903 Selling, general and administrative 4,791 4,649 18,901 16,134 Expense for patent related matter - - - 1,264 ---------- ---------- ---------- ---------- Total costs and operating expenses 26,940 23,527 98,577 66,938 ---------- ---------- ---------- ---------- Loss from operations (3,292) (3,182) (13,567) (13,970) Other income (expenses), net 53 155 (27) 170 ---------- ---------- ---------- ---------- Net loss $ (3,239) $ (3,027) $ (13,594) $ (13,800) ========== ========== ========== ========== Basic and diluted net loss per share $ (0.08) $ (0.07) $ (0.32) $ (0.34) ========== ========== ========== ========== Shares used in computing basic and diluted net loss per share 42,684 42,020 42,494 41,083 ========== ========== ========== ==========
CEPHEID CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2005 2004 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 16,072 $ 23,189 Marketable securities 21,150 34,250 Accounts receivable 13,976 14,584 Inventory 7,989 6,544 Prepaid expenses and other current assets 583 402 ------------ ------------ Total current assets 59,770 78,969 Property and equipment, net 13,000 9,756 Restricted cash 661 688 Intangible assets, net 29,757 30,902 ------------ ------------ Total assets $ 103,188 $ 120,315 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 9,293 $ 8,074 Accrued compensation 3,191 2,836 Accrued royalties 3,115 2,113 Accrued other liabilities 6,812 4,517 Current portion of deferred revenue 2,963 3,847 Current portion of license fee payable 8,538 10,476 Current portion of line of credit 4,000 - Current portion of equipment financing 2,297 1,889 ------------ ------------ Total current liabilities 40,209 33,752 Long term portion of deferred revenue 4,402 6,190 Long term portion of license fees payable 387 8,561 Long term portion of equipment financing 2,052 1,604 Long term portion of line of credit - 4,000 Deferred rent 735 599 Commitments Shareholders' equity: Preferred stock - - Common stock 155,347 152,136 Additional paid-in capital 7,518 7,517 Accumulated other comprehensive gain/(loss) 39 (137) Accumulated deficit (107,501) (93,907) ------------ ------------ Total shareholders' equity 55,403 65,609 ------------ ------------ Total liabilities and shareholders' equity $ 103,188 $ 120,315 ============ ============ -----END PRIVACY-ENHANCED MESSAGE-----